FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION
[NO. 60DR-15-879] HONORABLE ELLEN BRANTLEY, SPECIAL JUDGE
Ragon Owen, P.A., by: Sharon Elizabeth Echols and Christopher
L. Travis, for appellant.
Kidd, Ryan & Rowan, by: Judson C. Kidd and Catherine A.
Ryan, for appellee.
F. VIRDEN, Judge
Nauman appeals the Pulaski County Circuit Court order
awarding Rene Nauman alimony. Michael also challenges the
circuit court's findings that certain stock options are
vested marital property and that future interests from these
stock options are divisible. We affirm.
and Rene Nauman divorced in November 2016 after nineteen
years of marriage. The parties have two children ages
fourteen and seventeen. The parties agreed to split much of
the marital estate roughly in half, with each party receiving
around $6.5 million in liquid assets and personal property.
The circuit court held a bench trial on the remaining issues
of alimony, child custody and support, and whether the Brady
Corporation stock options constitute marital property.
approximately the first sixteen years of the marriage,
Michael was an executive vice president at Molex,
Incorporated (Molex). When Michael left Molex in 2014, he was
paid $12 million pursuant to a noncompete agreement, and this
money was placed in government savings accounts and stocks
and bonds. Also in 2014, Michael became the president and CEO
of Brady Corporation (Brady), a publicly-traded company
located in Milwaukee, Wisconsin, from which he receives a
yearly salary of around $718, 000. When Michael joined Brady
he was granted restricted stock-unit options and
nonqualified-stock options as part of an incentive-and-reward
plan. The terms of the stock options are found in the
"Brady Corporation Restricted Stock Unit Agreement,
" the "Brady Corporation Nonqualified Stock Option,
" and the "2012 Omnibus Incentive Plan."
trial, Rene testified that she was two college-credit hours
short of a bachelor's degree in marketing and that for
the first two years of the marriage she worked for Baptist
Health in the marketing department. After that, Rene quit her
job to take care of their children full time. She explained
that throughout the marriage, Michael traveled extensively
for his job, only coming home on some weekends. Rene
testified about her estimated monthly expenses including home
maintenance, utilities and water, phone, the children's
school expenses, medication and supplements, life insurance,
health insurance, auto and home insurance, property tax, a
mortgage, haircuts, pet care, gifts, yard work,
transportation, the children's sports activities, dining
out, the children's yearly camps, travel and
entertainment, and vacation. Rene presented two affidavits
regarding monthly expenses. The first estimate shows monthly
household expenses of $12, 995, and the second estimate shows
expenses of $19, 946.25. Rene testified that in estimating
some expenses she used her best guess, and for others she had
a verified amount. She explained that the second estimate is
higher because she did more research, and the second
affidavit includes a mortgage estimate.
Shuffield, a certified public accountant and expert
specializing in financial forensic designation relating to
legal procedures and evidence, testified at the trial.
Shuffield testified that she estimated Michael's income
several different ways, and based on her assessment, his
child-support obligation according to the chart ranges from
$8, 871 to $15, 060 a month.
offered testimony regarding the Brady restricted stock units
granted to Michael, and she explained that "Mr. Nauman
simply has to continue employment for the stocks to vest. He
also becomes fully vested if he dies or is disabled. Under
section 2(b) of the Restricted Stock Unit Agreement, if he
terminates his employment, then he loses any unvested
RSUs." Shuffield also testified that if there is a
change of control of the company or if there is a merger or
dissolution, the stocks become fully vested. Shuffield stated
that if Michael is terminated for cause, he would be unable
to exercise his rights. Shuffield declined to estimate the
fair market value of the stocks because "their value
will depend upon the market price at the date of actual-of
vesting and then will vary thereafter until exercised."
As for the nonqualified stock option, Shuffield testified
that the vesting schedule is the same as the exercise
period-a third after the first year, another third after the
second year, and the final third after three years or more.
explained that if Rene does not liquidate any of her assets,
the dividends from investments provide around $85, 000 in
yearly income. Shuffield testified that, according to her
pretax analysis, if Rene chooses to spend the principal and
the interest of the assets she receives in the divorce, not
including retirement accounts or child-support payments, she
will have a yearly income of $130, 000. Shuffield estimated
that if the spendable amount of child support is added to
this amount, Rene's yearly income would be around $190,
circuit court entered the divorce decree on November 23,
2016. Michael was awarded the family home, and he was ordered
to pay Rene $75, 000 for her share of the reduction of the
debt. Rene was ordered to quitclaim her interest in the house
to Michael. The court found that Rene owns and is financially
responsible for the Foxcroft condominium valued at $145, 000.
Rene kept her Cadillac Escalade, and Michael kept his Jaguar
and a Buick sedan. The court equally divided multiple
investment accounts, the "WWMDTA" family trust,
three separate 401k accounts, the Roth IRA, the retirement
plan, and all cash.
circuit court made the following findings regarding "the
status and divisibility of stock options." Michael was
granted rights to acquire certain shares of stock in Brady,
though the right to acquire those shares is not yet
exercisable. Some of the rights are outright grants of stock
and others are stock options. Michael acquired the rights
during the marriage, and those rights are exercisable in
2016, 2017, 2018, and 2019. Under the terms of the stock
award, Michael will receive the stock if he still works for
Brady at the time the options become available. The stock
options are vested once the rights to them cannot be
unilaterally terminated by the employer without terminating
the employee; thus, Michael's rights to the stock award
are vested and may be divided as marital property. Only the
portion of the awards intended to compensate for
Michael's past performance (and not incentive for future
work) are considered marital property, and the stock awards
are divided as follows: eighty percent of the award
exercisable in 2016; forty percent of the award exercisable
in 2017; and none of the awards exercisable in 2018 and 2019.
Michael retains all interest in the Brady stock options that
vested as of May 11, 2016, and he is ordered to pay Rene $46,
164.75 for her property interest in it. Michael also retains
the shares of Brady stock held in the Morgan Stanley account,
and he must pay Rene $92, 936 for her interest in the stocks.
circuit court found that Michael's monthly net income is
$43, 562 and set child support according to the chart at
$9100 per month to continue until both children reach age
eighteen. The circuit court clarified that no child support
shall be payable on Michael's stock grants that are
divided with Rene, but Michael shall pay fifteen percent of
the value of the stock grants that are not divided (the
post-2017 stock grants) into a trust for the children.
party received two Utah Educational Savings Plans, and they
were ordered to equally divide the savings bonds.
circuit court also awarded $2500 a month in alimony to Rene.
The circuit court concluded that despite the large amount of
money involved in this divorce, $2500 in alimony is "not
a lot" and is appropriate here. The court acknowledged
that, though Rene has a means of income through investments,
child-support payments will continue only four more years and
that "with two school-aged children, with which the
Plaintiff is heavily involved and the Defendant who is only
able to be here some, only working part-time right now is
feasible for the plaintiff. . . . [s]uch work could be
increased as the children leave home. Therefore, the
Defendant shall pay spousal support of . . . $2500 per
month." The circuit court also noted that the matter of
alimony is subject to review in four years but that "the
Court is just not going to try and predict that far
filed a motion to reconsider on December 7, 2016. In it he
argued that the circuit court failed to consider or make
findings regarding Rene's financial need and that the
circuit court impermissibly automatically escalated alimony
at the end of four years. Michael also appealed the circuit
court's division of the rights to the stock awards as
marital property. He argued that Brady has the right to
unilaterally deny Michael these benefits; thus, he does not
have enforceable contract rights to the stock awards.
court did not rule on the motion to reconsider, and it was
deemed denied. ...